Since 2013, the world has witnessed the rise of China’s Social Credit System (SCS), one of the most complex governance projects ever attempted and the first of its kind in the e-governance sphere. The SCS began gradually, with a series of pilots being carried out across China. By 2020, it was meant to become an “ecosystem” that joined together separate schemes run by cities, ministries, and corporations, encompassing China’s population of 1.4 billion people. Through a system of points that rewarded good behaviour and punished breaches in trust, the SCS aimed to improve social cohesion and strengthen the rule of law.
Despite its seemingly innovative nature, the SCS found its origins as far back as the 11th century, when the emperor instituted early forms of group policing. In the 1950’s, rural farming communes measured status collectively, and by the late 1970s, the Chinese economy’s growth boom brought with it the proliferation of economic crimes such as fraud and food and safety violations. A lack of trust and social cohesion leading to growing apathy amongst the population were now at the forefront of the government’s concerns.
As such, by 1984, the “On the New Technological Revolution” report laid out steps on how to implement systems engineering in the “social domain”1. In 1995, President Jiang Zemin called for “the informatisation, automation, and intelligentisation of economic and social management”2. Hence, the Social Credit System was really an evolution of traditional collective control mechanisms that placed a stronger onus on the individual and his/her agency.
Rongcheng city: A case study
At the time of writing, of the over three dozen pilots already in place, the city of Rongcheng was perhaps the most advanced example of the SCS, according to Chinese officials.3 In Rongcheng, the System began by assigning an A rating and 1,000 points to each of the city’s 740,000 adult residents. From there, residents could win or lose points depending on their actions, causing their rating to rise to AAA or slip to B, C, or D.4 The rules were as follows: litter, run a stop light, fail to visit your parents, or be rude to neighbours, and see your rating fall. Conversely, commit a heroic act, donate to charity, or volunteer, and see your score rise.5 Honest acts such as returning a lost wallet could earn you points and possibly an award for your honesty, resulting in a kind of instant karma. Such benefits aimed to make the “honest decision” more attractive than the dishonest one.
The range of points a resident could gain or lose also depended on the act in question. Some offenses, such as drunk driving, brought with them hefty fines which could lead an A score to plummet to a C. Individuals with low scores were unable to book hotel rooms, register their children in top schools, or buy high-speed train or plane tickets. In contrast, those with an AAA score could receive rewards such as a $50 heating discount every winter and better terms on bank loans.6
Along with point increases and decreases, the use of black lists and red lists—which were applicable to both individuals and to companies—served to punish offenders by forcing them to internalise any negative externalities that have arisen from their actions by imposing restrictions in their day-to-day life in the form of restricted Internet services, ineligibility for loans, and limitations on schooling and employment opportunities.7
Disputing rankings and ethical concerns
While the SCS aimed to increase trust and social cohesion, as well as provide benefits for upstanding citizens such as access to credit and preferential rates on loans, a key source of concern was the lack of appropriate ‘mechanisms of credit repair’ that would allow the maligned to dispute point deductions and pursue avenues of redemption. Complaints from individuals who have been red or black-listed and have been unable to dispute the charges or to get their names removed from the list have already surfaced. Hence, one of the biggest concerns regarding point deductions and red/black-listing is the inability of maligned individuals to return to good-standing.
While some provinces had suggested community work and charitable donations as a formal path towards recovery, official policies failed to address the question of the long-term damage that accompanies public disgrace, such as the inability to get a job, to attract a romantic partner, or to engage in social activities. This is significant insofar as these hinder the ability of the individual to function as a productive member of society and to eventually raise their score. Thus, finding mechanisms of credit repair that don’t rely on monetary contributions is paramount, given that failing do to so disproportionately affects citizens with lesser economic means, effectively perpetuating the poverty trap. This is especially concerning when we consider the possibility of an individual’s scores spiralling out of control as a result of them being shunned by their community.8
Meanwhile, human rights organisations and the foreign media have denounced the Chinese government over mounting privacy and security concerns from the misuse of personal information through big data. Ethical dilemmas such as self-censorship, profiling based on privilege, intergenerational spill-over, corruption, and abuse of power based on political non-alignment also remained a point of contention in policy debates.
 Samantha Hoffman, “Managing the State: Social Credit, Surveillance and the CCP’s Plan for China,” China Brief Volume: 17 Issue: 11. August 17, 2017, https://jamestown.org/program/managing-the-state-social-credit-surveillance-and-the-ccps-plan-for-china/.
 Gordon G. Chang. "China's 'Digital' Totalitarian Experiment" Gatestone Institute. September 2018. www.gatestoneinstitute.org/12988/china-social-credit-system
 Rene Raphael & Ling Xi. "Discipline and Punish: The Birth of China’s Social-Credit System". The Nation. January 23, 2019. www.thenation.com/article/china-social-credit-system/
 Simina Mistreanu. "Life Inside China’s Social Credit Laboratory". Foreign Policy. April 3, 2018. foreignpolicy.com/2018/04/03/life-inside-chinas-social-credit-laboratory/
 Nicole Kobie. "The complicated truth about China's social credit system". Wired. January 21, 2019. www.wired.co.uk/article/china-social-credit-system-explained
 Simina Minstreanu. "Life Inside China’s Social Credit Laboratory".
 Jurgen Grote & Matteo Bonomi. "Making and breaking social capital: The paradox of China’s social credit system". DocResearch. May 2018. doc-research.org/2018/05/making-and-breaking-social-capital-the-paradox-of-chinas-social-credit-system/
 Mareike Ohlberg, Shazeda Ahmed, and Bertram Lang. "Central Planning, Local Experiments. The complex implementation of China’s Social Credit System." www.merics.org/en/china-monitor/content/5071
For a more in-depth review of the issues and debate, read the case study, Gamifying trust: Can you win at life? China’s Social Credit System and the rating revolution, written by Eleni Ayala Ojeda, under the guidance of Dr Natalie Pang and funded by the Lee Kuan Yew School of Public Policy.
If you’re interested in reading such content, subscribe here.